Gainful Employment and Community Colleges

A little more than two years ago, I speculated about the potential for Gainful Employment rulemaking to be applied to traditional colleges.  The Department of Education (DoE) took a step closer to making my speculation a reality with its scheduling of the second session of negotiated rulemaking for the week of November 18.

The DoE’s revised draft of the Gainful Employment rule has the potential to affect community colleges rather significantly.  The revised draft includes two new metrics that were not included in its August 2013 draft.  The first measures the cohort default rate of former students in a specific program – those who completed and those who did not.  The second is a measure of the repayment rate of the loan portfolio of a program cohort, and the principal must decrease by a minimum of $1 during a given year.

Traditional, nonprofit community colleges offer a variety of occupational programs in areas such as nursing, metalworking, fire fighting, etc.  Community college programs have traditionally had relatively low completion rates.  A report in my local Arizona Republic stated that six-year completion rates of the Maricopa Community College District had risen over a decade to 28%.  The rate includes both students who obtained associate degrees with the intent of going onto a 4-year university and those who completed certificates and degrees closely associated with immediate, gainful employment.

Community colleges are intentionally designed to allow local students easy access to a program and the flexibility to complete courses toward certification at their own pace.  Community colleges also are designed to be responsive to a broad range of working adults, including many who are from the American working class; their incomes are generally stretched to cover a wide range of family living expenses, including repayment of loans.

This round of negotiated rulemaking has the potential to result in changes at community colleges.  Some of those may be positive as community colleges address the need to assure that students complete programs and find gainful employment.  However, there may be negative outcomes for community colleges as well – from the implementation of restrictions on admission, less flexibility in program completion, etc.  These negative outcomes could affect enrollment at community colleges.  Whether the positive outcomes will outweigh the negative ones is not clear. And harm to community college enrollment has the potential to impact local economies with fewer employees with skills desired by employers.  This may well be a time to analyze impacts more carefully before the planned announcement of the rule.

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